Accounting and Finance Analysis: Beverage Industry Performance

This report provides a comprehensive financial analysis of three major beverage companies: A.G. Barr Plc, BRITVIC Plc, and COCA COLA European Partners Plc. It begins by identifying and evaluating the strategic plans of each company, focusing on their financial goals, measurable success indicators (including financial growth, sustainability, and decision-making processes), and financial performance. The report utilizes various financial ratios to assess each firm's performance, including profitability, operating, structure, and employee ratios. Key aspects such as operating expenditure, income generation, and debt-equity structures are examined. Furthermore, the report explores both internal and external sources of long-term finance available to these companies and discusses how long-term financing decisions can impact shareholders. The analysis offers insights into the financial health, strategic approaches, and investment opportunities within the beverage industry.

Accounting And
Finance For Managers

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
SECTION 1.....................................................................................................................................1
Identify Strategic Plans for each company which include financial goals and measurable
success indicators in terms of financial growth, financial sustainability and decision making...1
Evaluation of firm performance with help of various provided ratios........................................3
Investment opportunity which firm has best performing............................................................8
SECTION 2.....................................................................................................................................8
Internal and external sources of long term finance......................................................................8
Long term financing can affect their shareholders......................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The term accounting is record to keeping general financial transactions with summarising and
interpreting various reports and analysis (Ainsworth and Deines, 2019). It is basic concepts
which include income, expenses and cash flows statement and a profession which is dedicated
to carry out these tasks. In this report, financial goals, decision making and sustainability of A.G
Barr Plc, BRITVIC PLC and COCA COLA European partners should be discussed with the
help of many different financial ratios and identify internal and external sources of long term
and short term financing to a firm. In order to identify such source which are available to an
appropriate organisation for their future prospects.
SECTION 1
Identify Strategic Plans for each company which include financial goals and measurable success
indicators in terms of financial growth, financial sustainability and decision making
Financial goals of BARR A.G Plc:
A financial goal is a target to manage their money and involve saving and earning and
investing money to accomplish organisational objectives (Akpanuko and Umoren, 2018). The
firm earned GBP255.7 million pounds in 2020 which is reduced by 8.4% from financial year of
2019. Operating profits are decreased which is compared to 2019 by 1.3% and net margins are
also reduced by 1.1%. It reflects that financial year of this firm cannot meet properly targeted
goals and objectives. It has also developed by long term objectives for sustainable relationship
between customers and maintain and build their efficiency in business enterprise to identify
their actual financial performance are to be covered.
Success indicators:
It will show about firm growth which includes how much firm are able to achieve their
goals and objectives in organisations. Various key indicators which are identifying to success in
an business enterprise are as follows:
Financial growth: Recently it would be determined that firm faces a profits in business
are should be decrease due to enhance their cost of goods sold which should be decreased and
expected to generate income capacity.
Sustainability of finance: To making adequate information related to financial
sustainability to achieve a competitive advantage. It can identify financial structure and
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operation of business enterprise for their respective organisation. To complete their many
policies in long term finance to complete a sustainable competitive environment of firm.
Financial performance: During this financial year they comprises that in 2020, BARR
A.G Plc has to be performed in declining trend which causes loss in organisation (Brook and
Oikonomou, 2018). It is helpful to increase their cost of goods sold and total revenue which can
be earned by firm was 8.4% are lower than its previous year income.
Decision making strategy:
As a business leader, it would be identified that if they make a decision for business to
implement long term and short term decision making so that they have to clear about transaction
which they have made to identify and solve their financial year and also enhanced their firm
market share.
Financial goal BRITVIC Plc
Firm have also a goal to build and maintain their incomes to encourage the long term
market share of organisation (Farooq and De Villiers, 2018). In respect that if there is essential
market share and to earn their respective adequate amounts of profits so it will be easily to
promote their business environment should be healthy. It has to be analysed that firm has faced
so many difficulties such as trend to be declined and net margins are also by 2.6% respectively.
Success indicators:
Financial growth: The report says that there is a progress should be downward side in
financial position of business enterprise. It has to be analysed that earning per share of this firm
are decreased from 2018 to 2019. It has to be reported that earnings per share has to be 0.4% in
2018 and in 2019 it was reduced by 0.30%. The dividend per share has been arising in 2019
which impact that earning of this company has been reduced. It would be suggested that firm
needs to be managed their policies in a suitable manner.
Financial stability: This firm has adopted various strategies which are named as
building local favourites and many quality products which will order to promote their healthier
world and people so that innovative creation are there for their long term sustainability of firm
in an efficient and effectively manner.
Financial performance of firm: To make an adequate resource which is used by firm
so it will be a most efficient and advanced level of techniques that’s why firm performance
should be improved if firm has managed all these things.
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Decision making strategy of BRITIVIC Plc:
In state that firm has to manage all these things so there is a decision making their
expenditure are too much high amount instead of previous year comparison (Gyo Lee, Garza‐
Gomez and Lee, 2018). It is beneficial to attract more investors in this firm and connected so
many people so that firm can make new investments opportunities for their long term success.
Financial goals of COCA COLA EUROPEAN PARTNERS Plc:
The goals of this firm are already to making a profit basis and it should be highlight that
expansion of too much units in other markets so that there is acknowledgment that market share
should be earned.
Success indicators:
Financial growth: In terms of increasing their financial growth of business, fir needs to
be more cost effective and several advancements of technology so it will be easier for firm that
deal with appropriate competition of firm.
Financial stability: These firms made a drink only for organic drinks can be made and
they have an appropriate chance of financial growth should be enhanced for accomplishing a
market position of business (Hadbaa and Boutti, 2019). In this case, customers are aware for
this product to make an eco friendly environment that build to increase their financially healthy
environment.
Financial performance: Company maintain their income part for an efficiently manner
and increasing operating profits trend which will impact that firm can create more favourable
outcome towards conditions of market and hold on their investors and stakeholders of this firm.
Decision making strategy:
In case of business decision making strategy in terms of their long term basis which is
required to implement their long term sustainability which includes organic drinks and health
environment if firm has to maintain all these things so that they can prepare a long term strategy
of this firm and make decision in an efficient manner so that more customers are attract towards
this firm and this brand.
Evaluation of firm performance with help of various provided ratios
BARR A.G Plc
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Profitability ratios: These ratios determine their firm position and measure to evaluate the
ability of firm that generate revenues and income, operating costs at a particular period of time
(Kelton and Montague, 2018) . It is defined that firm faced a problem of breakdown in terms of
equity, profit margin and operating revenue. Firm has required to make a certain changes in
order to enhance their profit margin by reduced their financial expenditure.
Operating ratios: It displays their firm management and determine how firm can work
in an efficient and keeping costs to generate incomes and sales of firm. It would be described
that operating expenditure to income which is used to identify their generation of income in
terms to identify their operational efficiency. There are some ratios which is indication that
assets turnover ratio and interest cover ratio is one of most important form of ratio which
determine and identify their operational efficiency of firm. Here is some firm face a problem of
low assets turnover ratio but interest coverage ratio indicates that good results as compare the
turnover ratio which will be helpful to reach their long term stability in a business enterprise.
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Firm has maintain some of their ratios so that they can used in future purpose and 65 times
interest cover which will shows that positive sign of earning capacity of income (Nasr and
Ntim, 2018).
Structure ratios: These ratios are based on proportions of debt and equity capital for
structure of firm. It signify and determine that firm liquidity position determine current ratio and
liquid ratios have decreasing which needs to be changed by firm. Moreover, purpose of income
retention and decreased their loans and debts system should be easily managed for firm in an
efficient and effective manner.
Employee ratios: With relation to BARR A.G Plc, it is to be identified that firm needs
to be amended that in respect to earn and generate more revenue and promote their profitability
and productivity in an organisation for employees in an effective manner. It includes several
ratios which are named as profit per employee, operating income and cost of employees and
many more (Smith and Urquhart, 2018). These ratios have been calculated which shows that
firm need to improvise their employee earning capacity in terms to promote their long term
efficiency of firm
BRITIVIC Plc
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Profitability ratios: With relation to BRITIVIC Plc, these firm observed that there is a
reducing their profits which is not a good result for their long term efficiency of firm (Tan and
Low, 2019). For the year of 2017, it has to be earned in profit margin 9.7 which remain constant
in 2018 but in 2019 which was declined that 7.14 which is also good for overall growth and
success of organisation.
Operational ratios: These ratios determine that this firm examine its operational based
learning is suitable as it has interest coverage ratio of 8.43 in 2019 which is more than past year
which is one of most important as it recommend that firm has an effective and efficient learning
in terms to pay back their interest and debts.
Structure ratios: By analysing above firm structure ratios it determine that firm has
should be fluctuate earning in order to current ratio and liquid ratio. While their shareholders
liquidity ratios which displays that increasing trend defined that owner’s capital is sufficient o
that firm can be used this ratio for further transactions and used in business purpose so it will be
helpful to increase their operational efficient in business enterprise.
Per employee ratios: Certain firm determine their optimum trend shows in this ratio
which recommend that firm has maintain their healthy relations with other respective
workforce.
COCA COLA EUROPEAN PARTNERS Plc
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Profitability ratios: These ratios determine financial in nature and ms used in study to
generate income to check their business capability (Wang and Dyball, 2019). It will help to
make operating cost, balance sheet and equity of shareholders which takes a specific period of
time. This ratio analysed that firm has a good performer this year and generate more and more
profits in business.
Operating ratios: This ratios shows that firm management at generating their income
level are same time cost should also be down and if there is small ratio then firm can also likely
to become a generate efficiency in total expenditures versus income. It is also consist and based
on percentage level through this most of ratios are fluctuating if organisations have better sound
structure.
Structure ratios: In this firm, this type of ratio helps to measure and evaluate whether
firm has sufficient resources to meet their short term obligation in an efficient manner.
Per employee ratios: With context to BRITIVIC Plc, this non financial ratio determines
income each and every year for employee turnover on an average basis. It is basically determine
average number of employee who works in a firm which is divided by total income should be
generated (Weygandt, Kimmel and Kieso, 2018). To identify Coca Cola they should meet their
goals and objectives in a productive manner and many employee should be growing by maintain
employee relations in a proper manner.
Investment opportunity which firm has best performing
As per above analysis, it has been understood that all ratios have to be identified so result
is COCA COLA EUROPEAN Plc is best firm and perform best in any business enterprise.
Whether it is related investment or generating income they have to maintain their liquidity
position and more and more profits are generated. It has an optimum utilisation of resources for
earning capacity, turnover of assets and per employee ratios. It has broad range of services
which is provided for any different locations.
SECTION 2
Internal and external sources of long term finance
Internal financing: It is a procedure that firm using this finance to increase their profits
or assets to fund a new project and investment (Akpanuko and Umoren, 2018). There are
various methods to identify financing of business are as described below:
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Owner’s capital: This capital consists of which is invested by owner in business itself
and paid by owner from his savings account. It plays vital role in organisation so that ROI is not
paid on constant basis.
Cost: Owner capital cost is based on such capital of finance that they could have their
earned in any several other investment opportunity. For examples; if firm has earned income
more than a 25 million and equity is 5% then firm need to make a adequate earnings so owner
cost which they have invested are to be paid.
Risk: It is one of most difficult phase in any business like firm has a loss making then
they have to provide adequate number of shareholders which will impact its operations in
business.
Working capital: There is no impact on working capital but impact of cash flows should
be improved to make an efficient use of operations.
External financing: This defined that any type of business which they have acquire
outside the organisation (Gyo Lee, Garza‐Gomez and Lee, 2018). There are various methods
which are used in external finances are as follows:
Debt funding: When they borrow money to run their efficient business which they can
raise money from investors for those who are return to ensure and share their profits for firm.
There ROI is also paid on fixed basis.
Cost: In this, this type of debt funding is fixed as rate of interest and they can paid at the
time of losses also.
Risk: There is a risk to maintain in debt funding so there is requirement of interest
payment.
Working capital: Impact on working capital describes that if there is debt funding
impacted then cash flow are also affected and impacted on firm.
Long term financing can affect their shareholders
From above analysis, sources of internal and external financing in long term which owner
capital are best for both sources of finance and there is no certain risk which (Nasr and Ntim,
2018). It may be an advancement capacity to a firm and they will promote health decision
making in business for long term purpose. Moreover, it is one of most effective type of long
term financing.
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CONCLUSION
As per above mentioned information, it has been concluded that accounting for finance is
mainly used for transactions and identifying non financial information to carry out these
activities for business enterprise. In this report, various topics are covered such as financial
goals, success indicators and decision making strategy, evaluate performance with helps of
ratios such as profitability, operating ratio, per employees, structure ratios and internal and
external sources of long term financing.
REFERENCES
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Nasr, M. A. and Ntim, C. G., 2018. Corporate governance mechanisms and accounting
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